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Premise Health executive on why employers are taking health care into their own hands

Gabriel Perna | November 30, 2021

Premise Health was created when Water Street Healthcare Partners, a private equity firm, and Walgreens merged the latter’s onsite clinic business, Take Care Employer Solutions, with CHS Health Services to create a standalone company. In 2018, the company was sold to OMERS Private Equity.  

However, the organization’s history actually goes back farther than that, says Jami Doucette, MD, President of Premise Health. The forebearer entity that eventually turned into Premise Health ran an occupational health center in Manhattan for Random House publishing company during the 1960s. This particular center is still open and Random House is still a client, says Doucette. Moreover, many of the direct care companies that evolved into Premise merged in the 1980s, 1990s and into the 2000s, as the offerings focus went from occupational health to primary care.  

In 2021, Premise operates direct care clinics for employers and other payers with a mix of primary care, occupational health, pharmacy, wellness, musculoskeletal, behavioral health, and other services. The company has 11.5 million members, 850 physical wellness centers, and a digital wellness center. After acquiring CareHere, which operates wellness centers for self-funded employers, in late 2020, the company surpassed more than $1 billion in annual revenue.  

Recently, Premise Health announced it was expanding near-site health and wellness services in 10 markets across the U.S. including New York City, San Francisco, Washington DC, Chicago, Atlanta, Houston, Dallas Fort-Worth, Boston, Los Angeles and Phoenix. Health Evolution spoke with Doucette about the company’s expansion plans, how COVID changed the dialogue around virtual care, and more.  

How did the conversation around virtual care change in regard to your customers during COVID? 

We made a couple of strategic bets several years ago on digital as we transitioned our primary clinical platform over to Epic and we’re now actually the largest ambulatory instance of Epic on the planet. We also made a commitment to be one of their most digitally progressive clients at that time. And that meant several things to us. It meant multiple products in a virtual care environment. It meant device connectivity. It meant investing in a dedicated digital physician or provider team. And then honestly, we got lucky with our timing. Our dedicated digital provider team started January 2nd of 2020 and COVID hit in February. Rewind to pre-COVID, we were a typical provider organization, somewhere between 5-7 percent of our encounters were in a virtual environment. We peaked in April of 2020 with 85 percent of our encounters in a virtual environment. We’re now back around 35-ish percent in a virtual environment with material variability across our products. Behavioral health is still well above 70 percent in a virtual environment, but physical therapy is below 20 percent. Given the nature of how we get paid and our alignment with our clients and patients, we think the 35-40 percent range is where we’ll end up settling. 

From a client’s perspective, as the world has shifted in the last couple of years, the reality of how our members have accessed health care has shifted significantly as well. Prior to COVID, the on-site environment wasn’t incredibly powerful and convenient on those large campuses. In the beginning of COVID, virtual was the dominant conversation piece. We’ve seen kind of a settling out of virtual, but we’ve also seen a material rise in the demand for near site centers. As we think about large self-funded entities wanting to take greater control of their medical spend…doubling down on where the majority of that spend occurs has been critical in those strategies. Providing that segment of the population with access to this model in the communities in which they live, coupled with virtual care, has been a critical component in those clients’ perspective and strategies going forward.   

Traditional health care—community health care, health plans, PBMs, health systems—is entirely misaligned with the ultimate payer of health care services, and in many cases for Premise that’s the large self-funded employer or other self-funded entities like associations, trusts, labor unions.

Jami Doucette, MD

Speaking of which, what made you open in these markets you recently announced? 

Looking at our current clients as a starting point, we’ve mapped our book of business eligibility by [metropolitan statistical areas]. We’re in 300 MSAs in 45 states and Guam but certainly are concentrated in areas where large organizations have either formed their headquarters or have their populations. Not surprisingly, it mirrors some of the largest cities in the U.S. The market selection for expansion was predicated on where we’ve got that current client footprint and current client demand. It’s where we’re kind of getting pushed to grow and expand our access model rapidly to meet that broader segment of the population, those dependent segments, and the new reality of a hybrid workforce. It’s the recognition that a hybrid workforce needs a hybrid health care access model. 

What are your biggest challenges with these expansion plans? 

We are in a bit of a unique position. As we grow, we are building on our already present infrastructure. The announcement was simply calling out the fact that we’re growing further into the near site market. In a market where we might already have 25-30 centers, we’re simply adding to that infrastructure and accelerating growth in those specific geographies. Acknowledging the world we live in is a primary care world and primary care not just delivered locally but hyper locally, we’ve had to evolve since 1964 in order to better serve those members in a hyper local environment, but support that infrastructure both regionally and nationally. And that is in effect how we’ve set up our organization and how we’ve scaled successfully. 

Why do you think it’s important to lean into hybrid—whether it’s a hybrid care model or a hybrid workforce?  

We’re being held increasingly accountable to impacting and influencing the total cost of care for the members that engage with Premise. Capturing that engagement in both the virtual and physical environment…is critically important to impacting the entire member journey and influencing and driving down that total cost of care for those members. In addition, from an engagement perspective, it’s also critical to remove the barriers people have in accessing care. We have to acknowledge that COVID has changed a lot for many people—whether they are working, their daily routine, etc. if we’re accountable to members and meeting them where they are, then being responsive to that new reality is incredibly important.  

Why are employers focusing more in health care and particularly as it relates to primary care?  

It’s a fair question that’s at the crux of our existence. Traditional health care—community health care, health plans, PBMs, health systems—is entirely misaligned with the ultimate payer of health care services, and in many cases for Premise that’s the large self-funded employer or other self-funded entities like associations, trusts, labor unions. The recognition in the last several years is that health care spend is the largest, uncontrollable line item in an organization’s P&L.  

The recognition that there is misalignment in the status quo is becoming increasingly obvious to executive teams. If those executives are held accountable to those profits, controlling that expense line item is becoming an increasingly high priority. As a result, they’ve had to execute on and deploy alternative strategies rather than just holding their health plan accountable to a rising health care cost that’s average or less than average, which still ends up being much greater than inflation and wage increases. Those executive teams are waking up to the fact that they need to control this expense. They’re trying to get ahead of that cost curve.  

In reality, it comes down to incentives. Traditional health care, predicted on a fee-for-service model, makes no sense to the ultimate payer and the patient themselves. Providers in systems do more stuff and aren’t held accountable to the outcomes or experience. This resonates with those self-funded entities. They want that alignment with the providers who are delivering care to their employees.   

 

About the Author

Gabriel Perna, Senior Manager, Digital Content

Gabriel Perna is the Senior Manager of Digital Content at Health Evolution. He brings 10+ years of experience in covering the intersection of health care and business. Previously, he was at Chief Executive, Physicians Practice and Healthcare Informatics. You can reach him via email at gabrielp@healthevolution.com or on Twitter at @GabrielSPerna